nation." back to reality the . address thunderbolt. >> i want to be clear, i'm not wedded to every detail of my plan. i'm open to compromise. i'm open to new i ideas. i'm committed to solving our fiscal challenges. but i refuse to accept any approach that isn't balanced. >> schieffer: can the two sides find a way to get the country back on a sound financial footing before dacopian cuts in social and defense programs and an automatic tax increase go into effect at year's end? >> this is an opportunity for the president to lead. now, this is his moment to engage the congress and work towards a solution that can pass both chambers. >> schieffer: if upcertainty over making a deal were not enough, washington was rocked by the scandal involving c.i.a. chief david petraeus. we'll get the latest on petraeus and the chances of compromise on the financial argument from

republican senator lindsey graham. we'll get insight on the pretty thinking from his top strategist, david axelrod. then we'll go to our all-star panel of analysts. peggy noonan of the ""wall street journal"." david gergen of harvard university. dee dee myers of "vanity fair." and our own john dickerson. election 2012 is in the bookes, but the story is just beginning. and this is "face the nation." captioning sponsored by cbs from cbs news in washington, "face the nation" with bob schieffer. >> schieffer: good morning, again. on this veteran's day. and we begin with senator graham who is in clemson, south carolina. senator, thank you for coming. you are on the armed services committee, of course, so i want to start out with this out-of-the blue thunderbolt that hit washington friday concerning david petraeus the c.i.a.

director. he resigned, saying he had exercised bad judgment and had an affair. cbs news and several other agencies have now confirmed that the f.b.i. got on to this after a third woman told them she had received threatening e-mails from the woman he has reported to have had the affair with. so i guess i would just simply start, do you have any additional information to any of this? >> no, not really. i was just as surprised and from a national point of view, general petraeus turned around iraq. we were losing in iraq when he took over. we had it in awe good spot. unfortunately, i think the obama administration fumbled the ball with iraq. but he turned iraq around. he was a great general, and his resignation is a loss for the country. but i understand why he had to resign. >> schieffer: there are all these stories, these pieces of it that are now coming affect, that now there seems to be another woman who was involved, and she went to the f.b.i.

because she was frightened of these e-mails. do you-- do you think there ought to be a congressional investigation to sort this out, or is it best to just go on and leave it where it is? >> well, if there's no effect of the affair on national security, i think we need to move on. but at the end of the day, the one thing that that's happen in my view is we've got to get to the bottom of benghazi. i hate what happened to general petraeus for his family and the families for those involved, but we have four dead americans in benghazi. we have a national security failure in the making. i don't see how in the world you can find out what happened in benghazi before, during, and after the attack if general petraeus doesn't testify. so from my point of view, it's essential he give testimony before the congress so we can figure out big. from the congress' point of view, instead of doing this in a stovepipe way, have the dodd that needs to explain itself

itself, god knows the state department needs to answer for their behavior. i suggest we have a joint select committee of house and senate members and we do this together, not have three different committee ggz off in three different directions so we can get to the bottom of it like we did in watergate and iran contra. i think that would be smart for the congress to combine resources. >> schieffer: you're on record having said the administration either deliberately misled people about what led to the deaths of the ambassador and three other americans or it was just gross incompetence. now, susan rice, who is the u.n. ambassador at this point was pretty much the point person on this:j the administration. she went out on the sunday shows and first said it was not a planned terrorist attack about the was the result of a spontaneous demonstration. she is now being mentioned as one of those being considered for secretary of state. do you think what she said

during the early days of this investigation, should that factor in any way on whether she should be considered as secretary of state? >> absolutely wot a doubt. i generally defer to presidential selections for cabinets and judges. i voted for both supreme court judges, not because i would have chose them, because the president has a lot leeway, and if they're qualified people, i tend to support presidential picks. however, i do reserve unto myself and other members of congress the ability to say no when justified. i cannot imagine promoting anybody associated with benghazi at this point. it's not just what he said after. how did the place become a death trap for months why did we keep it open or not reinforce it? there are too many questions to be answered. i don't quite, frankly, trust her rendition of beg. i think susan rice would have an incredibly difficult time to get through the senate. i would not vote for her unless there's a tremendous opening up the information explaining herself in a way she has not yet

done. >> schieffer: well, i mean, would you try to lead a move to block her from getting the nomination if in fact she is-- >> i am not-- i am not-- i'm not entertaining promoting anybody that i think was involved with benghazi debacle. we need to get to the bottom of it. the president has a lot of leeway with me and others when it comes to making appointments. but i'm not going to promote somebody who i think has misled the country or is either incompetent. that's my view of susan rice. there are other people out there. i don't want to fight with the president over something like, this but there has to be an accountability. you can't just let this happen and act as it there are no consequences. and one of the consequences to me that susan price-- susan rice needs to be held accountable. >> schieffer: let's talk a little bit about the election, a lot of talk about your party is going to have to kind of rethink some of its positions. a former chairman of your party-- >> yeah. >> schieffer:-- said to me the other day, it's the lateen

organization stupid. meaning you're going to have to do manage to appeal to the hispanics. what was the impact of the election on your party, senator, and what needs to be done here? >> well, the one thing we do not need to do is abandon conservatism. and in the election poll, 50% said the government does too much and not too little. conservativism will sell with latinos. but the truth of the matter sthe immigration debate we engaged in, in 2006 and 2007, has built a wall between the republican party and hispanic community because of tone and rhetoric. president barack obama received 44% of the hispanic vote in 2004. by 2008 we were down to 28, in 2012 we are down to 27. it's the fastest growing demographic in the country and we're losing votes every election cycle and it has to stop. it's one thing to shoot yourself

in the foot. just don't relode the gun. i intend not to reload this gun when it comes to hispanics. i intend to pass an immigration reform bill that is an american solution to an american problem but we have nobody to blame but ourselves when it comes to losing hispanics and we get kget them back with some effort on our part. >> schieffer: would that mean finding some path to citizenship for the illegals that are in this country? >> it means securing our border which every american agrees with. it means making it hard tore hire illegal immigrants, verifying employment. we need to secure the borders. make sure you can't hire an illegal immigrant because you have documents that can't be faked. we need guest workers, and. when it comes to the 12 million, we need to be firm and fair-- self-deportation is not going to work. 65% of the people in the exit poll of this election supported a pathway to citizenship. here's what i think we should do

with the 12 million. fix it in a way we don't have a third wave of illegal immigration 20 gears now. americans want more legal immigration and fix illegal immigration once and for all. have the 12 million once you security border-- and you do nothing until you secure the borders, come out of the shadows, start paying taxes, pay a fine for the law they broke. they can't stay unless they learn our language, and they have to get in the back of the line before they can become citizens. they can't cut in front of line regarding people who are doing it right, and it could take over a decade to get their green card. i think that's the answer. >> schieffer: we have just a very short time here. i want to ask you about the fiscal cliff. can the republicans find a way to get some kind of a compromise with democrats so we can avoid this horrindous situation that goes into effect if you don't act? >> fair is not an option for the country when it comes to the fiscal cliff. say yes to simpson-bowles,

mr. president. i'm willing to say yes to simpson-bowles. we need more revenue in washington. we need more private sector jobs. we don't need to raise tax rates. we need to limit loopholes for the wealthy. mr. simpson, if you say yes to simpson-bowles when it comes to revenue, so will i and so will most republicans. we can get revenue without destroying jobs and both need to. no republican will vote for increased tax rates. we will insist our democratic friends reform entitlements something we've never done ask that's where the big money is at. say yes to simpson-expwoalz we'll get this behind us. >> schieffer: senator, thank you so much. and now we're going to get the other side of this picture. and joining us now, one of the architects of the president's victory, his senior campaign adviser, david axelrod, who is out in chicago. mr. axelrod, thank you so much for joining us. let me just start, on friday, the president said he was open

to compromise, but he said he would not accept any approach to deficit reduction, that does not ask the wealth tow pay more taxes. speaker boehner, the republican speaker of the house, has already said that's a nonstarter. aren't we right back where we were last year? >> well, i don't think so, bob, for a am could you have reasons. first of all, i think the speaker also said he wasn't going to get into details about what he would or wouldn't accept. he didn't want to foreclose discussions, and that was a positive sign. his rhetoric has been encouraging. and i think we have also had an intervening election, and in fact the position of the president articulated friday was the position that he's articulated throughout the campaign. you look at those exit polls, and a healthy majority of americans agree with him. and that's certainly going to help him form these discussions. >> schieffer: the president won, but this was a very close victory. and it came down to those battleground states.

and it was close even there. does the president feel that won a mandate? >> well, bob, on this particular issue, it wasn't close. as i said, if you look at the exit polls-- i think it was somewhere around 60% of the american people agreed with the president's position on this issue of taxes. it is obvious that we can't resolve the challenge here simply by cutting the budget. we've cut by $1 trillion. there are more cuts to be made but you need new revenues and every objective person who has looked at this agrees on that. so the question is where is that revenue going to come from? the president believes it's more equitable to get that from the wealthiest american americans who have done very well, and frankly, don't need those tax cuts. and who benefitted disproportionately from the tax cuts in the last decade. and most americans agree with

that. >> schieffer: speaker boehner seemed to suggest that he was open to closing loopholes to real tax reform. can you get there by just closing loopholes or will it take more than that? >> well, look, i don't want to prejudge the discussions. and i think that the speaker's comment have been encouraging. and obviously, there's money to be gained by closing some of these-- closing some of these loopholes and applying them to deficit reduction. i think there are a lot of ways to skin this cat, so long as everybody comes with a positive, constructive attitude toward the task. . >> schieffer: let's talk a little bit about the campaign. when did you know you had this won? >> we went into election day with confidence, and we had-- i had rems of data from these young kids who do these analytics on-- based on polling and based on our other data

we've gathered, and they pretty much hit it on the nose. so when the votes started coming in and matched up with the mod they'll they had created, and in one state after another, you know, we were-- we-- we knew that we were in good shape by 8:00 or 8:15 that evening, we were pretty confident that this race was going to be ours and it was just a matter of time, and less time, frankly, than we amounted. >> schieffer: was there any time during this campaign that you thought it might slip away, like, for example, after that first debate? obviously, there was some kind of a shft there. >> there was. but most of the shift after the first debate allowed governor romney to reclaim what he had lost after their convention, which wasn't very successful, and the 47% tape that became so well known across the country and was a negative for him. a lot of those republican-leaning independents who had moved away from him came back, so it was less about our

losing ground and him gain anything it restored the race to the one we had before the conventions and the one we always anticipated, where we were narrowly ahead. we never relink wished that lead in our data, and obviously, looking state by state, we were pretty confident. what is remarkable about this race, bob, isn't the volatility of it. , or wasn't the volatility of it. there was this illusion of volatility that was created by the spate of public polls, many of which varied, even on the very same day. but in our own data, it was a very steady race. we maintained a strong-- a narrow lead but a consistent lead, really for months and months and months. and it didn't fluctuate by much. >> schieffer: we saw something when the president came to your headquarters to say thanks to all the young volunteers. we saw a side of president obama we don't often see. i want to just roll a little of that tape and then ask you about

it. . >> and you guys, what you have done, the work that i'm doing, is important. i'm really proud of that. i'm really proud of all of you. and... ( applause ) >> schieffer: it sully seemed that the president was brushing away a tear there. we don't see that much emotion from the president. what was it like to be there? >> i was standing 10 feet away and i was brushing tears away myself as were many of those young people. so when he looked at those young kids and their sense of idealism and all the sacrifices they had made, not just for him but for the kind of country that they believe in, he really was overcome. and the president went around after that speech and he-- and he met with every single kid in the headquarters, and gave them

a hug and handshake and thanks and i think that hug and handshake and thanks has sent them off in a direction where they will make great contributions in the future, and it really was a wonderful coda on a great campaign. >> schieffer: and what about you? what do you do next? >> well, i'm going down-- in keeping with that-- i'm going to spend part of my time start an institute of politics at the university of chicago. my feeling is if i can help inspire some young people to get into this arena as candidates, as strategists as journalists, then that would be a great contribution to make. >> schieffer: david axelrod, thank you so much. and we'll be back in a minute. tdd#: 1-800-345-2550 low-cost investment options-- tdd#: 1-800-345-2550 like our exchange traded funds, or etfs tdd#: 1-800-345-2550 which now have the lowest tdd#: 1-800-345-2550 operating expenses tdd#: 1-800-345-2550 in their respective

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gergen. i want to get back to the petraeus situation. you knew general petraeus and this woman he was allegedly involved with. >> i have known both of them for several years. i consider themselves friends. i have a very high regard for both. in the last 36 hours i have communicated with both of them. i sent them messages of support because i think this is a national tragedy. it's a tragedy not only for the families but the country. david petraeus, i think he's been one of the finest leaders of his generation. he is an iconic figure for any number of young troops. i have talked to people who served under him and they are devastated by this because they look up to him so much. >> schieffer: it seemed like they were really anxious to get him out of there once this happened. >> it's hard to tell. the accounts from mr. clapper, telling him he needed to resign, i only know that second airily through the press. the code of honor goes very deep

in general petraeus, and i do believe that he is-- you know, that he has a sense of shame about this, a sense he acted dishonorably, and he would act out of a sense of honor. i can't tell you how important-- it's what they teach in the military, and it's what he lived up to all his life. un, it-- i would hope people would remember there have been other great leaders in this country-- remember president eisenhower, when he would general-- remember franklin roosevelt and lucy mercer, how important that relationship was to him in the second world war. i think we have to be understanding that as the saying goes, the best of men are still men at their best. >> schieffer: peggy, you are one of them? >> yeah, to tell you the truth, i think this story is a little mysterious. i don't really understand why the general, having made a painful mistake, painful for himself and his family, why he

had to leave, and why he was, according to the press, sales ared to leave. and i understand what he would feel is the breach of honor, but this is a truly great and constructive american career. and i'm just not sure why he had to leave. the second thing, i don't think anybody quite understands how the f.b.i. could have been going through his e-mail, and the f.b.i. leaders didn't know, justice didn't know. how did this begin? how did it go forward? when was the white house told? you just have to wonder what the heck is this? >> schieffer: we're going to talk more about this on page 2. i'll be right back with thoughts of my own.

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